UNCN Acquisition Corp, an affiliate of New York-based private equity firm Welsh, Carson Anderson & Stowe, has agreed to merge with United Surgical Partners International, an operator of surgery centers in the US and Europe, in a deal worth approximately $1.8 billion (€1.38 billion), United Surgical Partners said in a statement. That value includes the assumption of debt.
The transaction is expected to close in the second quarter of this year.
United Surgical’s management is expected to stay in place, Donald Steen, the company’s chairman, said in the statement.
Based in Dallas, Texas, Steen and Welsh Carson founded United Surgical in 1998. In the US, the company owns and manages ambulatory surgery centers. In Europe, it owns and operates three private surgical hospitals. The company owns or operates 141 centers total, according to the statement. Of the 138 facilities in the US, 78 are co-owned with not-for-profit healthcare systems.
Shareholders of United Surgical stock will get $31.05 in cash per share. That value is 13.4 percent more than the sock’s closing price of $27.39 on January 5, as well as $25.62 more than its closing price on November 13, which was the day before Welsh Carson made its offer, the statement said. The stock price is also 18.8 percent greater than the company’s average closing price of $26.13 over the last three months.
The terms of the agreement include a provision by which United Surgical can evaluate alternative proposals from other firms. Should the company decide to enter an agreement with another firm, it must pay a termination fee of $42.5 million to Welsh Carson. If the alternative agreement comes before February 17, 2007, United Surgical Partners must pay $14.7 million to the firm.
Welsh Carson, founded in 1979, focuses its investments on the information and business services, healthcare and communications industries. It has approximately $16 billion of capital under management and has made more than 200 management buyouts and investments, the statement said. It is currently investing with Welsh, Carson, Anderson & Stowe X, a $3.5 billion fund, as well as with WCAS Capital Partners IV, a $1.3 billion fund.
The firm made two notable healthcare investments in 2004. It agreed to buy all the outstanding stock of cancer care provider US Oncology in a deal worth approximately $1.7 billion in March 2004. At the time, Welsh Carson already owned 14. 5 percent of the company. In October of that year, the firm joined Thoma Cressey, a private equity firm based in Chicago, and the management of Select Medical, an operator of private hospitals, to take Select Medical private in a $2.3 billion deal.